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Will business go to Memphis?

The first full beta of the Windows 95 upgrade is on the way. But many businesses may hold out for Windows NT 5.0.

The first full beta of the Windows 95 successor, Memphis, comes out next week. But businesses don't necessarily need to get too excited.

Although Windows 95 was hyped actively as a desktop operating system for corporations, Microsoft (MSFT) is now preparing for Windows 95 and its successors to fade from the corporate stage.

Although the company has in the past resisted making a firm distinction between the corporate and the consumer market for its operating systems, Microsoft is making no attempt to hide the fact that it wants to pitch NT, not Windows 95 or Memphis, to corporations still upgrading from older versions of Windows.

"NT is clearly the long-term business OS," said Adam Taylor, Windows group program manager.

"They've been very ambivalent from day one about the positioning of Windows 95 versus NT Workstation," said Dwight Davis, editor of industry newsletter Windows Watcher. "But they've been more straightforward recently about pushing NT as the business desktop of choice."

While they share a name, Windows 95 and Windows NT are actually completely different operating systems. Windows 95 is evolved from DOS while NT is based on early OS/2 development work with IBM. Microsoft has been talking for years about merging the kernel--the core code--of Windows NT and Windows 95. This would save development money and let the company release several Windows "flavors" based on a single core technology.

But the plan seems to be back on the front burner. The latest timetable is to merge the kernels sometime after the separate releases of Windows NT 5.0 and Memphis.

"When they finally share the same kernel, the difference between Windows 2002, or whatever it will be, and NT Workstation will be packaging, not technology," said Dan Kusnetzky, director of client-server operating environment research at International Data Corp.

That merger has in fact already begun. NT 5.0, not due until at least next year, will incorporate all of the features Microsoft is adding to Memphis: the Internet Explorer browser as the main interface, the ability to receive analog and digital TV broadcasts, and beefed-up administration tools. But NT will also have a lot that Memphis won't: support for multiple CPUs, tighter security, and a more "crash-proof" base technology.

One reason why Microsoft didn't promote NT Workstation from the beginning for all corporate desktops was that NT required more memory: NT 4.0 requires 48MB of RAM to really work well while Memphis will take 16 to 24MB.

Nevertheless, many IS managers have already responded to the NT call. One manager of a Fortune 500 company, who asked to remain anonymous, is in the middle of shifting 6,000 PCs from Windows 3.x to 32-bit systems. All the desktops, 80 percent of the company's PCs, are being outfitted with NT Workstation, while the laptops are getting the original version of Windows 95. The choice to put NT on the desktops was not difficult, the manager said.

"For new desktops coming in, the cost to go from 32 to 48 MB of memory is miniscule," the manager said. "The licensing cost difference between 95 and NT is miniscule. Backward-compatibilty is not a problem, at least here. But laptops are more of a challenge, and memory is much more expensive."

Microsoft hopes that everybody else will make a similar decision, although it will continue promoting Memphis as a reasonable upgrade path for companies with a lot of older machines.

While it many not always be apparent, Microsoft is concerned about the competition. Memphis is at least six months off and NT 5.0 at least a year. A lot can happen in a year, including the growth of network computers, enhancements to Java, and the emergence of Apple Computer's Rhapsody.

Kusnetzky says that Microsoft wants corporate users to spend their time worrying about Memphis vs. NT--this means that they're not thinking about software from other companies.

"Microsoft is slowly getting the market to think about the battle as one Microsoft product versus another," said Kusnetzky.

This is why Microsoft wants to differentiate its operating system lineup. "I don't think Microsoft really cares as long as people move to other Microsoft products," he added.